Side Gigs

The Master Archive!

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Beating the SALT Deduction Limit

By Keith Taxguy / July 6, 2020 /

As you can see by the details of the programs from the states above that have some form of pass-through entity tax that the rules vary widely by state. Many use a credit to pass-through the benefit while others adjust income on the member level.

Many considerations need to be taken into account. Even if the SALT limit were eliminated there would still be instances where the pass-through entity tax would be beneficially to entity members. 

There are also reasons not to make the election (except in Connecticut where it is mandatory) as the pass-through entity tax can affect the Qualified Business Income Deduction, Earned Income Credit, Saver’s Credit, Premium Tax Credit and more.

The tax professional preparing the entity return and that of all the members will have an easier time determining the best course of action.

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10 Ways to Earn an Extra $10,000 This Year

By Keith Taxguy / May 22, 2020 /

There are so many reasons to ask, How can I make an extra $10,000 this year? Maybe you want to retire early and a small extra income will do the trick coupled with your savings and investments. The economy might be bad, your hours cut or are unemployed. Maybe you are retired and just want something to do that adds value to the lives of others while providing extra income for bills.

Regardless your reasons for wanting to earn extra money, what you need is a list of ideas for accomplishing the goal. Below is a list of 10 ways to earn an extra $10,000 this year (unless you are reading this New Year’s Eve, then you can start next year). Each of these opportunities are used to earn extra money by family members or clients in my office. If you read to the end I have two bonuses.

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The CARES Act: Maximizing the Employee Retention Credit (ERC)

By Keith Taxguy / May 16, 2020 /

A large number of business owners have avoided the many benefits the government has offered in these trying times. The large number of choices has led to a perfect example of people’s behavior when confronted with too many choices. Even tax professionals are struggling to understanding all the different programs. Alvin Toffler’s overchoice is clearly hampering small business owners. Too many options reduces the number of businesses that will apply for any, even if they qualify. That is the biggest risk facing the American economy in 2020. If business owners shy away from programs designed to help them through these unique times more will fail, costing jobs and long-term damage to the economy and harming America’s competitiveness. 

I encourage you to discuss your situation with a competent tax professional. Yes, the IRS is still playing with the rules because they haven’t figured it all out yet themselves. But you can still plan accordingly. Whether a PPP loan or the Employee Retention Credit is best for you, you owe it to your employees, community and yourself to explore all the options.

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Maximizing Benefits Under the CARES Act

By Keith Taxguy / April 4, 2020 /

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) is the attempt by Congress to reduce the economic dislocation caused by the current pandemic. Taxes play a key role in the Act, along with several economic stimulus policies. 

Normally a new tax law requires time to figure out all the details. The Tax Cuts and Jobs Act (TCJA) of 2017 is still looking for clarifications on several issues, some of which are addressed in the CARES Act. COVID-19 had pushed economic decline into overdrive. The American economy has never declined at such a pace. Businesses and individuals went from good economic conditions to millions unemployed and many businesses forced to close. A draconian stimulus package was required.

The CARES Act is $2.2 trillion of federal stimulus. With no time to iron out the details, rumors are flying. Normally reputable sources of information are struggling to get facts out. Misinformation is rampant. This post, along with the accompanying Facebook Live event, will outline the facts as they currently stand. The facts might change is some situations. I will correct those errors in this post periodically so you have a reliable resource.  There are many instances where the only answer is: I don’t know. Because nobody does, even the people in charge of the programs. 

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Financial Crisis Planning from The Wealthy Accountant

By Keith Taxguy / March 24, 2020 /

The stock market is down, reflecting the dim prospects for companies trying to turn a profit in a quickly declining economy. Decisions need to be made while you are under heavy duress. Should you sell an investment, or maybe buy? Is early retirement or collecting Social Security early a good move? How does your business survive if it has been deemed non-essential? The financial decisions you make today will have consequences for years to come.

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Security Recovery Plan for Businesses

By Keith Taxguy / February 28, 2020 /

All too often we install the security cameras after we are burglarized; start carrying pepper spray after an assault. Business owners, large and small, face heightened risks in our modern world and reactive security plans do not cut it. A proactive plan can prevent the breech before it ever happens.

Small business owners, income property owners and even people with a side hustle need to have a security plan. It’s not only a big business problem. Some businesses are required by law to have a security plan. For example, the IRS requires tax professionals to have a written security plan that is updated annually. Those selling securities or insurance, banks and other financial institutions have similar requirements. 

Whether your industry requires a security plan or not, you must have one. In this post we will start with a short discussion on security plans for tax professionals and accountants because that is the demographic this blog serves. I will then share where the detailed security plan nearly failed in my office and how we shored up our procedures to protect employees and clients. Then we will discuss implementing a security plan for your business, regardless the field you are in. I will point out the benefits of a security plan for even as innocent a side hustle as dog walking. If you never need to test your security plan in real life, all the better. But if fate comes knocking I want you, kind readers, to be prepared so risk is reduced. 

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Earn Money Reading Financial Statements

By Keith Taxguy / February 4, 2020 /

Since most roofers are good at roofing and poor at keeping accurate records, you have a powerful side gig opportunity to make a difference in your community while earning above average income. 

All business eventually need funding. Your ability to read financial statements allows you to consult with clients at a higher level and to gain desired result. You can handle the raw data entry if you want or farm it out to a bookkeeper. Regardless, you lead and give directions. 

Done right, you and your clients will profit.

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How the IRS Chooses You for an Audit

By Keith Taxguy / January 28, 2020 /

Now that tax season is under way it is time to consider audit proofing your tax return. Small steps you take today can save you time, money and headaches later. 

First, the good news. Audit rates have been falling the past decade by a substantial amount. For 2018, the IRS audited .45% of individual returns, down from .59% in 2017. IRS funding cuts between 2011 and 2017 cost the IRS 27% of its enforcement staff (an 18% decline in tax examiners and a 40% reduction in revenue officers), according to the Government Accountability Office. 

The reduction in IRS enforcement efforts does not mean the IRS doesn’t have the authority to aggressively deal with tax scofflaws. The IRS still carries a big stick and focuses on certain problem areas. Taxpayers claiming the earned income credit faced an audit rate in excess of 1% in 2018, compared to the overall audit rate of individual tax returns the same year.

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